
Missed the tax deadline? Here’s what you should do
If you haven’t filed your taxes yet, don’t panic — but act fast.
Income tax is a money term you need to understand. Here’s what it means.
Taxes levied on the earnings of companies and individuals are referred to as income taxes. Earnings subject to income taxes can come from diverse sources, including wages, salaries, dividends, interest, royalties, rents, gambling winnings, and product sales. In the United States, income tax is one of the biggest sources of revenue for the federal government.
When people talk about income taxes, they generally mean individual income taxes, paid by employees or other people who earn income. However, companies, estates, trusts, and many other types of entities also pay income taxes based on revenue or income.
The U.S. income tax system is a voluntary system. Not in the sense that paying income tax is optional, but rather the federal government depends on each taxpayer to voluntarily report all of their earnings on a tax return and compute the appropriate tax themselves.
The IRS enforces tax laws and ensures that everybody pays tax properly. The agency gets a copy of a person’s W-2 form each year, and if she does not file a return, the agency can easily calculate her tax and send her the bill. The IRS can also charge interest and penalties to people who pay tax late, and file lawsuits against tax evaders.
Need help with tax planning? Check out Bankrate’s tax calculators.
Fernando earns $150,000 a year in salary, and this year he earned $18,500 in short-term capital gains and $3,000 from long-term capital gains. This puts his total income at $171,500. Under IRS rules, he may deduct his state and local taxes of $12,000 and charitable contributions of $2,000 from this amount, plus four personal exemptions of $4,050 each for himself, his spouse and his two children. This puts his total taxable income at $141,300. His total income tax would amount to $26,000.
If you haven’t filed your taxes yet, don’t panic — but act fast.
Typically, taxpayers have two options: Take the itemized deductions or take the standard deduction.
Regardless of what may cause a person to miss the tax-filing deadline, there are potential consequences.
Applying for more time to file your taxes is easy. Just don’t put off paying your tax bill.
The fast-approaching deadline for filing your 2021 taxes is April 18, 2022.
There are seven tax brackets for most ordinary income: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
The credit was confusing even before Congress revamped it for 2021.
Here’s how to use a Roth IRA to pay for your child’s college tuition.
This popular tax break can be one of the trickiest.